Personal Injury Settlement Be Garnished
If you file an insurance claim or lawsuit and owe money, you may wonder if creditors can garnish your South Florida personal injury settlement. The answer is: it depends. The government could garnish a portion of your settlement for back taxes, unpaid child support, or other past-due totals.
Regarding creditors, you may want to discuss your case with a Fort Lauderdale personal injury lawyer. Here, you can avoid garnishment of your payout based on the applicable laws. Connect with a lawyer from the Law Offices of Wolf & Pravato today to learn more. Dial (954) 633-8270.
What Is Garnishment? How Does It Affect My Settlement?
You may be familiar with garnished wages if you owe a creditor, agency, or another party money. Wage garnishment is how creditors and other debt collectors ensure bills get paid. It requires a court order. With a court order, your employer will take a portion of your wages to pay for the unpaid debt. There are limits on how much they can legally take.
This may be possible when it comes to alimony or child support payments, too. The court must order the garnishment, and this allows the creditor to take a portion of the incoming money.
Under 15 U.S.C. § 1673, a garnishment cannot exceed a quarter of the debtor’s disposable income. Disposable income is the money left over after you pay for housing, food, and other necessities. The court decides how much to withhold during the hearing to approve the garnishment.
Creditors Generally Cannot Garnish Your Personal Injury Settlement
Under Fla. Stat. § 222.14, creditors cannot garnish income from a settlement or annuity––unless the creditor can show the debtor attempted to delay or defraud them. 26 U.S.C. § 130 also protects the proceeds from personal injury claims from garnishment and other claims.
Also, case law further defines when settlements might be accessible to creditors. In general, creditors cannot pursue proceeds from a personal injury case. However, creditors could garnish the proceeds from other cases, such as property damage claims.
A Government Agency Could Garnish Your Settlement for Child Support
While private companies generally cannot garnish your personal injury payout, government agencies can. They can garnish your settlement for child support, federal taxes, or Florida state taxes. The agency must still have a court order to take money from your payment account.
According to the Florida Department of Revenue, the state’s Child Support Program may take a portion of your insurance settlement if you have past-due child support in Florida. The previous rules still apply. The state cannot take over a set limit of your settlement, and it considers the cost of your injury-related damages.
Consider This Scenario to Understand Settlement Garnishment by the State
Here is a scenario in which the state could garnish your injury settlement:
- You suffered harm in a collision.
- You take your case to court, and it awards you $100,000.
- You owe child support to your former partner or spouse.
- The state could garnish up to a certain amount for those purposes.
- Yet, much of your settlement would pay for your injury-related losses.
So, if you recover funds through a settlement, the state can’t garnish all of it. After all, you still have injury-related expenses because of the collision. Another party can’t take everything you need to pay for your losses.
Still, this may not stop another party from infringing on your rights. This is where it could benefit you to hire legal help.
Talk to a Personal Injury Lawyer About Your Past Due Expenses to Protect Your Settlement
If you know you have creditors looking for money (or you owe past-due support or tax payments), discuss your unique circumstances with your attorney. They can assess your options and protect your legal rights.
If you were hurt and incurred expenses, you deserve fair compensation to cover these damages. This is the goal of an insurance settlement or civil lawsuit. How much you can receive depends on many factors, including whether a government agency garnishes a portion of your payout.
A garnishment could apply to a lump-sum payout or an annuity–– if the applicable laws allow the garnishment at all.
What You Can Expect from an Injury Lawyer in Florida
Your situation is unlike anyone else’s. Your Fort Myers personal injury lawyer understands that. After assessing your case, they’ll first determine whether you owe money to another party. Then, they will:
- Build your case against the liable party
- Calculate your injury-related losses
- Consider how garnishment can affect what you can recover
- Prevent other parties from taking what you need
Many law offices (including our own) offer free case reviews. Here, you can explore your options at no obligation.
Connect With One of Our Personal Injury Attorneys Serving South Florida
Talk with an personal injury lawyer Florida from the Law Offices of Wolf & Pravato about your South Florida personal injury case today. We provide free case reviews, so injured victims can understand their rights. Call (954) 633-8270 today to get started. Our team is here to help you.